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TCS Capital Management Is Betting Big On Angie’s List Inc (ANGI)’s Turnaround

According to a recently filed 13D form with the Securities and Exchange Commission Eric Semler‘s TCS Capital Management has acquired some 2.76 million shares of Angie’s List Inc (NASDAQ:ANGI), raising its stake to 3.80 million shares valued at $17.82 million based on the current stock price. The holding represents about 6.5% of the company’s outstanding shares.


The New York-based TCS Capital was founded in 2001. Semler employs a bottom up stock picking approach to find value investments, particularly in the telecom and media sectors. The fund has about $262.6 million worth of regulatory assets under management while the value of its public equity portfolio stood at $152.68 million according to the fund’s last filing.

Eric Semler
Eric Semler
TCS Capital Management

We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 123% since then and outperformed the S&P 500 Index by around 65 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Angie’s List Inc (NASDAQ:ANGI) provides a fast and reliable platform to gain access to the best local service in more than 720 categories, including home repair and healthcare, to more than three million customers. The company doesn’t allow anonymous reviews and the users can quickly gage which service providers are reliable, and since these services have a ‘high cost of failure’, it significantly reduces the customers’ risk exposure. So far this year, Angie’s List Inc (NASDAQ:ANGI)’s stock has slid by more than 25%, but there are strong indications that the recovery is in close sight.

Northland Capital has recently upgraded the stock to ‘Market Perform’ from ‘Underperform’. In its financial results for the first quarter Angie’s List Inc (NASDAQ:ANGI) delivered a net loss per share of $0.14, which beat the estimates by $0.03. However, revenue of $87.34 million missed the expectations by $2.07 million. In addition, the number of paying subscribers went up to 3.17 million during the June quarter, marking an increase of 2% on a quarterly basis and a 12% rise from the same quarter last year.

Angie’s List Inc (NASDAQ:ANGI) also filed a lawsuit against, Inc. (NASDAQ:AMZN) on June 19 in the U.S. District Court in Indianapolis, claiming that the e-commerce giant stole proprietary information to establish a competing home services business Amazon Local, LLC. According to Angie’s List, several Amazon employees created accounts to find information on the best service providers, who they ultimately signed up for Amazon Local. The terms of these accounts, however, prohibit the use of this information other than personal purchasing purposes.

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